Although I understand that piracy can be alarming, the piracy aspect of this isn't the root of the problem. Those pirated IAP's probably come from the Far East, and if you clamp down, you'll certainly reduce piracy, but you aren't going to see appreciably better revenue.
Fixing this requires taking a hard look at the "sales" funnel and at the larger game to see whether the IAP is a fit for the game. During testing, have friends and family play through the demo and then ask them at the end whether they'd buy it based on what they've seen. Evaluate whether you are providing the right ratio of free to paid content. When the demo finishes and the paywall goes up, is the player hooked to your game and feels a *need* to pay to see what's next? It's these sort of processes you need to think through.